CW Capital, tenants’ group reach deal over Stuy Town suit

The Stuyvesant Town-Peter Cooper Village Tenants Association said it reached an agreement with CW Capital after months of negotiations over major capital improvements that could save tenants there $30 million over the next decade.

Residents at the 11,000 unit complex had been in negotiations for months with the landlord, CW Capital and the state Division of Housing and Community Renewal over five MCI increases that were originally sought in 2009. Those hikes were requested by former landlord Tishman Speyer for capital improvements to security systems, video intercoms, a video command center, water tanks and repaving of walkways. The requests, made with the DHCR, would have resulted in tenants paying thousands of additional dollars to cover the cost of the improvements.

Tenants fought the increases, however, claiming the hikes were actually an end run by the landlord to make up for the losses incurred by the firm when the tenants won millions of dollars in a major legal battle over the deregulation of apartments.

“I think what really drove this [agreement] was the potential for an extended litigation period,” Susan Steinberg, chairperson of the Peter Cooper/Stuyvesant Town Tenants Association, told The Real Deal. “Everybody just wanted finality and certainty.”

She said in some cases tenants will save up to $3,000 each in MCI costs, including retroactive credit. The impact on each individual tenant varies, based upon, among other things, the number of rooms in each apartment, how long the tenant has lived in the complex, and whether the tenant was part of the class-action lawsuit over deregulation of apartments.

“We are very pleased to have worked with the Tenants Association to reach a settlement,” said Andrew MacArthur, managing director of CWCapital Asset Management, in a statement. “We have worked closely with the TA to reach an agreement that mitigates the impact of the increases for our residents and brings finality to this dispute.”

Council member Dan Garodnick, a tenant at the complex and frequent critic of the property’s ownership, said the deal will roll back a method owners have been using to generate additional income in lieu of rent.

“Squeezing every penny out of residents through MCI ‘s has been a common practice in Stuyvesant Town and Peter Cooper Village,” said Garodnick, in a statement. “Since the MCI law strongly favors landlords, the Tenants Association wisely took advantage of an opportunity to negotiate a deal that will save $30 million for residents over the next 10 years.”

The tenant’s organization is scheduled to hold a general meeting on May 10th at Intermediate School 104, located on East 20th Street in Manhattan, to discuss the deal.

Tim Collins, the lawyer for the tenants association, declined to comment. A spokesperson for DHCR was not immediately available for comment.

MCIs are simply one component of Rent Stabilization that, as a whole, is clearly and heavily weighted in favor of Tenants. So its disingenuous to say that it strongly favors Landlords without referring to the overall context of rent stabilization. Rent Stabilization limits rent increases, but doesn’t limit expenses. The longer you run a building without replacing critical items like boilers, water towers, windows, etc. – the more expensive it becomes for the owner and the more hazardous it becomes for the tenant. So you have to incentivize Landlords to spend the money on those systems, which clearly benefit the tenants by improving their living conditions. Otherwise, the buildings will begin to fall apart. Older buildings have to last for many more years because it is impossible to build replacement housing quickly enough to meet the demand. The tax payer is kicking in to pay for new housing. Tenants at PC/ST should be kicking in more to pay for improvements to theirs.

JEng

my regulated tenants enjoy a better heating system and better repairs than their greedy slumlord. The law sucks because they keep changing it more and more in favor of tenants and even the Governor gets personally involved as he did with Marolda Properties. That’s not a good sign. I don’t think we have a fair government at all and the press never scrutinizes tenant claims and government puts forth new legislation ignoring that existing legislation already addresses the issues.